FSA 'must produce report on collapse of Icelandic banks'

The former chief executive of Singer & Friedlander, the City investment
bank bought by Kaupthing, has called for the Financial Services Authority
(FSA) to publish a report into the Icelandic banks' collapse.

Tony Shearer, who was leading Singer & Friedlander when it was acquired by Kaupthing, said the Government had 'learnt none of the lessons' from the failure of the Icelandic banks

Tony Shearer, who was leading the 100-year-old Singer & Friedlander when it was acquired in 2005, said the UK Government has "learnt none of the lessons" from the failure of Kaupthing and Landsbanki.

His comments, made in a letter to The Daily Telegraph, come days after property tycoons Robert and Vincent Tchenguiz were arrested by the Serious Fraud Office as part of their investigations into the collapse of Kaupthing.

The SFO arrested nine men, including two in Iceland, in an operation that involved 135 police officers in London.

The downfall of Kaupthing cost the UK Treasury £2.5bn, after it bailed out 160,000 UK customers in its deposit arm Edge. Councils are thought to be still owed around £750m from the bank's demise.

Mr Shearer said: "It is time the FSA publishes a report into the collapse of Iceland's Kaupthing and Landsbanki. Then we would all learn something, and the Government and regulators would know what needs to happen to ensure it does not recur."

He added: "Kaupthing went bust in early October 2008. In February 2009, the FSA was still saying its failure was due to the banking crisis and not the reasons I gave to the FSA in 2005 and the TSC [Treasury Select Committee] that these people were not suitable to run a UK bank.

"The UK Government shows no interest in addressing the issues raised by the collapse of banks such as RBS [Royal Bank of Scotland] and Kaupthing. They have learnt none of the lessons because they have made sure that no analysis of what went wrong has been published."

It is understood that the SFO is planning further raids as part of its investigation into the failure of Kaupthing. The agency started the probe in order to establish whether "substantial value" was extracted from the bank "in the weeks before it collapsed".

Robert Tchenguiz was one of Kaupthing's biggest clients with loans of almost £1.7bn, which were used to fund investments in companies such as J Sainsbury, the supermarket chain.

The Tchenguiz brothers have denied any wrongdoing and say they are confident that once the investigations have concluded they will be cleared of any allegations of wrongdoing. The tycoons were released without charge.

Reports said Kevin Stanford, the fashion tycoon who owns All Saints, has alleged in a legal letter that Kaupthing used deposits from British savers to inflate its own share price. This was allegedly by passing deposits to wealthy customers on the condition they bought Kaupthing shares.